Yesterday was a busy one. And yes, I was out for most of the day, Black Friday. Only I think it was more of a Gray Friday.
I think this year’s winter spending boom isn’t going to be what people expected. I spent a good part of the day watching folks, and the shopping frenzy wasn’t really there. Sure, folks were out, but were they buying as expected? I didn’t see it.
For those who know me well you’re already aware, I dabble into the realm of economics (looks like that 12 step program didn’t help). And I’ve been watching over the past few months with extra interest. I think we’re at an inflection point. In other words, transition. It’s not surprising.
For well over a decade we’ve borrowed and spent our way through life. Interest rates go down, the value of your house goes up, take more money out of your house (by the way, when rates go up, prices usually go down….that a proven as well). That’s been the track record for a while now, and it’s catching up. You can only borrow so much. Can I be sure about that?
Take Japan for an example. After their market bust in the 90’s the banks lowered rates like mad. And no growth occurred. The real interest rate in Japan, when taking their inflation rate into consideration, was 0%. No cost to borrow money in reality. And they had a painful 12 year slump.
So, watching the shopping action yesterday I’ve come away with a strong feeling that the economic slowdown nobody wants to believe in has already started up in force. High gas prices, staple food prices spiking, etc. Anyone remember the 70’s?
Sorry gang, a totally different type of post today. But there’s a ton going on that begs many questions right now, and I couldn’t help but post a short bit on what I’m seeing!
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Definitely a reflection of the 1970’s. I think far too many people have forgotten what it was like. actually, I think they have forgotten what occurred in southern California during the late 1980’s and early 1990’s. There is a definite repeating cycle.
Given the overborrowing and it now being time to pay the piper, I think disposable income for the rampant commercialism that has come to represent the “season” there will definitely be a bleak result in the shopping figures. Not to mention here in SoCal where the writer’s strike has put so many of the tangentially affected out of work.